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Order Processing Kaizen - Joseph Vitalo and Mark Guy

Summary

Work Processes
1. End-to-end work process for supplying industrial machine parts
2. Order Processing component of total value chain

Problem

Long lead-times

Poor on-time delivery (75% from producer's perspective; less from customer's perspective)
Angry customer considering switching business to an alternate supplier

Reason

Lots of waste in process (wait, unnecessary processing, rework)

Problem allowed to fester unresolved for more than a year

Actions Mapped and evaluated waste in the end-to-end work process to identify where the major sources of difficulty were. Uncovered the Order Processing subprocess as a major source of delays. Did Office Kaizen for Order Processing to eliminate extreme variability and waste.

Outcome

Order processing cycle reduced to a consistent 4 hours from a pre-event range of 9 hours to 16 days

Lead time reduced 75% .
On-time delivery rose to 94% (by customer's judgment) .
Customer satisfaction improved and goodwill was re-established.

Learning

Involve customers whenever possible because eliminating waste in your operations may require your customer to eliminate waste in theirs. Also, involving them and builds immense goodwill as they see you striving to improve the value they receive.

Changes in pricing and business practices that affect customers can't be done ad hoc. They must be predictable from the customer's perspective and fully communicated to all stakeholders. Otherwise, the generate waste and immense ill will.
Set a deadline for responding to information requests concerning the work process and its current performance when preparing for a Kaizen event; otherwise they linger unanswered and delay the start of the event.

Abstract

Two Kaizen events were completed to correct significant customer dissatisfaction with lead time and on-time delivery. The problem had been brewing for more than a year and the customer was getting ready to switch suppliers. The first Kaizen focused on the end-to-end process from customer order to receipt of product. It identified just where in the value chain the major source of the difficulty was located. With that knowledge, a second Kaizen was done on the Order Processing work process. In both cases, we used the approach described in the Kaizen Desk Reference Standard. We had customer involvement throughout for a number of reasons. One, goodwill needed to be re-established between the customer and the supplier because it had been shredded by failure to address the customer's concerns. A second was that it was likely that part of the problem was located with the customer. Participation by the customer was extremely beneficial as relationships between people were mended and new relationships were built. It also allowed us to fully uncover and eliminate the waste that clogged the system.

Improving Product Shipping - Joseph Vitalo and Tom Lowery

Summary
Work Processes		Separator Preparation and Packaging (Product Shipping) (Separators are a type of industrial filtering product.)
Problem		Reduced revenue and profits due to high labor cost and lost opportunity
Problem		Dissatisfied customers due to late delivery

Reason		Workers in the shipping process served multiple product lines. The cycle time for one product line, Separators, was too long causing people not to be available to ship other product lines that had unmet demand. This loaded up cost on the Separator product and reduced its profit margins. It also delayed realizing revenue from other products losing us money and angering our customers.

Actions		Kaizen the Separator Preparation and Packaging work process to eliminate problem

Outcome		Mission elements were accomplished—throughput was increased yielding faster collection of revenues, cost for shipping Separators was reduced adding profits, and customer satisfaction was elevated.
Outcome		Cycle time reduced 59% from 2 hours and 24 minutes to just 59 minutes. Travel/transport was reduced 37% in terms of time and 56% in terms of distance (from 3,215 feet to 1,424 feet). All the sources of rework found in the event were eliminated. More than 100 pages of paper output and storage per work cycle were eliminated. Set up time was reduced by 22%. Motion was reduced 16%. $25,200 annual savings in direct labor cost for the Separator product line. Workers were redeployed to shipping other product variations that were behind schedule.

Learning		Ask your customers what they want, don't presume you know. You may be adding features they do not want. It builds your relationships and it will uncover waste.
Learning		Work processes are like attics—they both accumulate stuff you don't really need. We are prone to accumulate behaviors, interim outputs, and information without regularly validating whether they continue to be needed. Eliminate this proneness and you will prevent waste from seeping into your systems. Any behavior that is repeated should be eliminated. If it can't be eliminated, it ought to be automated.

Abstract

A Kaizen event was completed on a shipping work process to correct inadequate throughput, lost revenue and profit, and late product deliveries. We used the approach described in the Kaizen Desk Reference Standard. The Kaizen team was made up of the operators who performed the work process and two floor managers. The major forms of waste detected were travel/transport, rework, set up, and motion. The team also identified two safety hazards. By eliminating paperwork and set-up activities that the customers did not want, redesigning the packing workstation, relocating packing materials and the computer used to access order information, placing packing crates on dollies, color-coding the labels to match the caps that needed to be applied to the product, altering the labeling process, redesigning the packing crates, 5-S'ing the storage area, and many other improvements—the team reduced the cycle time by 59% and achieved other dramatic waste reductions.

Component Receiving - Mark Reed

Summary
Work Processes		Component Receiving
Problem		Delays in fulfilling orders
Problem		Excess cost

Reason		Lot's of waste in the work process.

Actions		Kaizen the work process to eliminate the waste.

Outcome		Cycle time reduced by 26%.
Outcome		Uncovered and corrected 11 safety problems. Identified another opportunity to reduce cycle time even more.

Learning		Always incorporate the uncovering of hazards into your search for waste. It requires little effort and produces important benefits. Everyone should return home as whole and well as they arrive at work.
Learning		Use a high level value stream mapping exercise to uncover components where the greatest opportunities for improvement exist. Use progressively more detailed mapping and waste evaluation analyses to target in which subprocesses your Kaizen events will produce the greatest benefits to the company.

Abstract

A Kaizen event was conducted in Chu-Pei, Taiwan on a component receiving work process to reduce delays and costs. We used the approach described in the Kaizen Desk Reference Standard. The Kaizen team was made up of the workers who performed the work process and spoke only Chinese. The goal of the event was to reduce the amount of time it took to complete the inspections of incoming components. We reduced it by 26% by cutting out the unnecessary work steps and reducing the travel. By traditional thinking, the whole inspection work process is waste, but due to the stringent quality requirements required by our customers, we cannot simply eliminate the inspection. They value it and are willing to pay for it, so that means that it is not waste.

Improving the Core Staging and Setting Process - Joseph Vitalo

Summary
Work Processes		Core Staging and Setting (Cores are forms used to create casting molds. Staging refers to assembling cores on carts for setting. Setting places cores on a plate that is used to stamp molds for casting.)
Problem		Operating Cycle time too long Rework due to improperly handled cores Scrap due to improperly set cores Safety hazards due to the ergonomics of tasks – bending, lifting, turning, pushing, and repetitive motion (cores can weight up to 11 pounds each) Elevated person hours per ton of product produced
Problem		Business Impact Reduced profits Hindered ability to meet customer expectation for continuously improved pricing

Reason		Uncertain before event. It was presumed that the human operations were delaying machine operations and that was creating a bottleneck. As to why, there was no idea. Workers seemed focused and applied themselves continuously to their tasks. The task is highly repetitive and physically demanding. Cause of rework and scrap was not understood, but thought to be associated with human handling.

Actions		Kaizen the Core Staging and Setting work process to eliminate problems

Outcome		Mission elements were accomplished—cycle time was reduced, throughput increased, and cost reduced enabling the satisfaction of customer expectations while sustaining the opportunity for profits.
Outcome		Cycle time reduced 29% Value-added ratio improved 71% Throughput increased by 88% Travel/transport reduced 85% in cycle time and 76% in distance (from 1,907 feet to 458 feet) Wait reduced by 61% 8 of 15 hazards removed (follow up actions will remove remaining items) Set up time reduced by 29% Unnecessary processing reduced by 58% Over $180,000 in net annual savings

Learning		Observation is critical to discovering what is actually happening. We discovered that the operators were not the bottleneck at all; it was the machines. Also, the rework and scrap we observed were due to machine operations, not human operations.
Learning		Process observations of rapidly performed work operations are best done from videotape. We observed over 900 human operations performed inside 45 minutes. We taped the observations and did our measurements using the tapes. We could never have recorded the observations in real time.

Abstract

A manufacturer of ductile iron products for the automotive industry is engaged in a major rollout of Lean throughout its manufacturing function. As part of this rollout, it is developing a core team of Kaizen facilitators. The business identified the core staging and setting work process as a first event for this team. The event was led by their instructor and applied the Kaizen method documented in the Kaizen Desk Reference Standard. The core staging and setting process was selected because waste was observed in its operations and its cycle time was slowing down the mold line, the operation where molds are produced. A lowered molds-per-hour rate means less throughput, higher person hours per ton, and more product cost. Industry customers unremittingly demand timely delivery of products and consistently reduced pricing.

The Kaizen team was made up of the facilitators who included people who work in and with the target work process and augmented by an operator who performed the work process. As the event unfolded, input from all process operators was elicited and used to uncover the sources of problems and their fixes. The final results of the event were the cumulative contribution of the team and the work process employees.

The major forms of waste detected were wait (46% of cycle time), setup (21%), travel/transport (10%), and motion (8%). In addition 15 hazards were detected, mostly ergonomic in nature. The team addressed both machine operations and human operations in developing its improvements. On the machine side, improvements modified maintenance methods, recalibrated software controls, and modified a machine part to extend its mean time to breakdown. On the human side, the team modified the scheduling of job runs to group jobs using like metals, designed a new dunnage system that would greatly reduce ergonomic issues and setup, and 6S'd the work area to reduce travel and transport and eliminate hazards, among many other actions. As a result, cycle time was reduced by 29% and process's value-added ratio was improved by 71%. Wait was reduced by 61%, travel/transport by 85%, setup by 29%, and unnecessary processing by 58%. Scrap was reduced 21.66 tons per month and throughput was improved 88%. 8 of the 15 hazards were eliminated in the event. The remaining hazards are scheduled for elimination as a follow up to the event.